Below is an analysis of the various taxation proposals in the 2012/2013 budget. The interpretation of each proposal we have listed has been sourced from the Institute of Economic Affairs 2012 Budget Guide.
In regard to excise duties, there’s a proposal to revoke the status of state officers from payment of excise taxes. This proposal is intended to ensure that state officers contribute to the revenue basket
In regard to import duties, below are a couple of proposals:
- The budget proposes removal of duty on converters of analogue to digital television signals (top set box) and ICT software. This is aimed at making top set box affordable to Kenyans.
- The 2012/2013 budget also suggests removal of import duty on ICT software’s. If passed, it will make ICT software cheaper to Kenyans and equally attract foreign direct investment.
- There’s proposed exemption of duty on inputs for use in the manufacture of medical diagnostic kits. This will help increase access to health and improve health status plus make health care affordable.
- There’s proposed remission of duty to producers of food supplements for infants and HIV/AIDs infection persons. The will help increase supply of food supplements for infants and HIV/AIDs infected persons.
- The budget proposes reduction of duty on food supplement from 10% to 0%. This will encourage importation of food supplement which will subsequently improve the health of infants and HIV/AIDs infected persons by making food supplements accessible.
- It’s also proposed that duty on second hand clothes to be reverted back to KES 1.1 million from KES 1.9 million per 20 foot container. This is aimed at encouraging import of second hand clothes.
Other tax measures in the 2012/2013 Budget include mapping out of all residential and commercial areas and implementing a comprehensive strategy for landlords to be taxed on rental income. This is nothing new as rental income is like any other form of income which should be taxed.